1. Eminent Domain in Finland
Mr. Markku Markkula Deputy Director-General National Land Survey of Finland (NLS)
Mr. Kauko Viitanen
Professor, Aalto University, Helsinki
Land and Poverty
Conference
World Bank Washington March 22th, 2017

2. Statistics of Finland 5,4 million inhabitants 15,8 inhabitants per km2
(40,5 per square mile)
2,7 million real estate units
2,6 million building and
dwellings
0,6 million enterprises and
corporations
3,7 million vehicles

3. CONTENTS Cadastral Surveyor is obliged to solve
disputes regarding land ownership
and border disputes if they occur during the Cadastral Land Surveying Procedure, for ex. During Eminent Domain
Two phases – Permission (1) and Cadastral Expropriation Procedure (2)
Compensations in case of expropriation
If possible the Market Value Method is used
Purchase Price Register – some lag, not quite up-to-date
Also Connection with Property Taxation in Finland

4. PROTECTION OF OWNERSHIP
is guaranteed by sections of the Constitution of Finland
The ownership (freehold) of land is
also protected by the same principles.
Main Prerequisites for Expropriation of Property:
1) “public interest”
2) “just and fair compensation”

5. EXPROPRIATION PROCESS
Expropriation Permit
Council of Ministers etc.
Prior to Expropriation Land Survey
Administrative Courts handle appeals
The Supreme Administrative Court
Expropriation Procedure (NLS)
Cadastral Expropriation Procedure
Also ownership (freehold) disputes and border disputes can be solved in connection with land surveyor’s decision.
In certain minor cases NLS (Cadastral Land Surveyor) can also grant an expropriation permit.

6. PUBLIC INTEREST Highways, Railways Airports Transmission Lines
What does “public interest” mean in
practice (de facto)?
Usually land is needed for important
construction or infrastructure projects, as for
Highways, Railways
Airports
Transmission Lines
Nature Reserves and
Other public purposes
The projects serve public welfare and extensive group of people
The benefits to the public must be larger than the disadvantages for private owners

7. PUBLIC INTEREST Who decides when the “public interest”
demands “taking of land by force”
(expropriation)?
In principle the legislators, who can
Decree laws for expropriation for certain purposes or
Decree laws, which give the right to expropriate whenever certain needs appear (for example for main road construction or nature reserve)
The expropriation permit is always needed. It could be given
for example by the Council of Ministers or the permission could be based
on official confirmation of a plan. This permit and many other
common rules have been defined in common expropriation legislation.

8. CADASTRAL EXPROPRIATION PROCEDURE
Expropriation takes place in an
expropriation procedure enacted
in law
The decisions are made by an
independent expropriation committee
(1 land surveyor + 2 lay members)
An appeal against the decision is made to the Land Court
An appeal against the decision of the Land Court is made to the Supreme Court, provided the Supreme Court grants leave to appeal

9. APPEAL - COURTS Supreme Court (SC) Retrial permit from the SC is
obligatory to appeal
Land Court as
division of the 8 District
Courts
Decision made
in the Cadastral Procedure
REFA
231 §

10. EXPROPRIATION PROCEDURE
Compensations are paid according to ownership data recorded in the LR (Title and mortgage register).
If there is something vague regarding ownership, compensation can also be deposited on state bank account.
Border disputes and certain ownership disputes can be solved by land surveyor during the process (Real Estate Formation Act REFA, section 184).
Cadastral Surveyor is allowed to decide any compensation caused by the infrastructure project.
Appeal against the decisions given by the expropriation committee is made to the Land Court.
NLS appoints the Cadastral Land Surveyor on a case by case basis, not the parties.

11. JUST AND FAIR COMPENSATION
What is fair and just compensation?
“Synonym”
“Full” compensation
Financial position of the property owner must remain unchanged
Only real financial losses can be compensated
If the project brings profits to the landowner they can be cut from the compensation
Every landowner gets compensation defined with uniform regulations

12. COMPENSATION vs. VALUE So what is fair, just and full compensation…?
Financial position of the property owner must remain unchanged…?
First of all compensation, which enables the owner to get another similar property instead of the expropriated one, can be seen as fair, just and full
Thus, the Market Value of the object represents also the full, just and fair compensation and
“Capital Comparison Method” (“Market Method”) is the most usual way to determine the compensation

13. COMPENSATION vs. VALUE
If Market Value does not represent the full loss of the owner?
Income from the property can be very
high so the value defined by “Investment
Income Method” is higher than the
Market Value Or
- For example the construction costs
of the building could have been specially
high (and the “Cost Method” gives a higher
result than other methods)
… these types of values (and valuation methods) can also
be taken into consideration when defining the compensation

14. COMPENSATION vs. VALUE Summary … fair value:
Value must be assessed without the influence of the purpose of
expropriation
Value has to be based on the commonly assessed quality of the object
at the time of valuation. It is defined as a market, income
or cost value.
Property must be valued as a part of the property of the landowner, not
that of the expropriator.
Choose the method, which produces the highest compensation
(value) for the landowner, if reasonable and realistic

15. LOSSES MUST BE COMPENSATED
There are three basic types:
1) Compensation of the object
If the whole or part of real property is taken (physically)
Valuation as described above
2) Compensation of disadvantages
If there remains disadvantages, that is, the use of the property becomes difficult
Valuation based on decreased income or on decreased market value
3) Compensation of damages
For example, the construction work has caused certain damage
Valuation usually based on costs

16. OTHER LOSSES TO BE COMPENSATED
Also, other losses could be compensated:
1) Losses of business income
Valuation by reliable “proof” of income losses etc.
2) Transferring (resettlement) costs of a building
Valuation by costs
The “expectation” or “speculation” values are usually not to
be compensated.

17. LAND COURT PROCESS
Inquiry into most cases also in the terrain with the parties present

18. JURISDICTION of LAND COURTS
Rovaniemi Lapland LC
Oulu
Oulu LC
Kuopio, North Savonia LC
Vasa Ostrobothnia LC
Turku
Varsinais-Suomi LC
St. Michel
South Savonia LC
Hämeenlinna
Tavastia LC
Helsinki, Vantaa LC

19. LAND COURT – COMPOSITION
The Chairman of the Land Court =
a legally trained member of the
District Court
The other members
The Land Court Surveyor (+ an additional Land Court Surveyor in some cases) and
+ 2 lay members of the court
The Land Court may also include another legally trained member of the court
In some cases (see REFA §) only the Chairman constitutes a quorum in the Land Court

20. LAND COURT – CASES The land courts deal with disputes
and appeals arising from land surveying operations e.g. decisions made in a Cadastral Procedure.
Case types are
divisions, partitions, parcellings, easements (REFA)
procedures under the Expropriation Act and the Highways Act

21. APPEALS AGAINST CADASTRAL LAND SURVEYS IN THE YEAR 2015

22. THE SUPREME COURT The decisions of a land court can
be appealed against in the Supreme Court.
a retrial permit is needed from the SC
the appeal and application for retrial permit (leave to appeal) is to be made at the same time by the applicant
The main task of the SC is to establish judicial precedents in leading cases, thus ensuring uniformity in the administration of justice by the lower courts.

23. Source http://www.kko.fi/29537.htm
THE SUPREME COURT
The most important function is to
rule on important points of law
in cases
which are significant for the entire legal order + guiding thereby the administration of justice in future cases
these precedents are usually created in cases for which the applicable Acts of Parliament and Decrees do not provide a clear solution for a question of law or in which there is room for interpretation.
Precedent
Source

24. FINALLY
Property valuation is largely based on the Purchase Price Register
This Register is based on data
produced by Public Purchase
Witnesses (“notaries”) in Finland
Register is maintained by NLS
It includes information regarding all real estate transfers since the year 1980
Property Taxation is also based on Purchase Price Register data collected and maintained by NLS
A new taxation system is to be developed with Finnish Taxation Authorities. NLS has a central role.

25. Thank you!